AB 3240: California Ban on Scholarship Displacement Act of 2021: Cal Grant awards.

Existing law establishes the California Community Colleges, under the administration of the Board of Governors of the California Community Colleges, the California State University, under the administration of the Trustees of the California State University, the University of California, under the administration of the Regents of the University of California, independent institutions of higher education, and private postsecondary educational institutions as the segments of postsecondary education in the state.

Existing law, the Cal Grant Program, establishes the Cal Grant A Entitlement Awards, the Cal Grant B Entitlement Awards, the California Community College Expanded Entitlement Awards, the California Community College Transfer Entitlement Awards, the Competitive Cal Grant A and B Awards, the Cal Grant C Awards, and the Cal Grant T Awards under the administration of the Student Aid Commission. The Cal Grant Reform Act revises and recasts the provisions establishing and governing the existing Cal Grant Program into a new Cal Grant Program. Existing law specifies that the act becomes operative only if General Fund moneys over the multiyear forecasts beginning in the 202425 fiscal year are available to support ongoing augmentations and actions, and if funding is provided in the annual Budget Act to implement the act.

The California Ban on Scholarship Displacement Act of 2021 prohibits an institution of higher education from reducing the institutional gift aid offer of a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for an academic year as a result of private scholarship awards designated for the student unless the students gift aid exceeds the students annual cost of attendance, as specified, and prohibits the institution of higher education from considering receipt or anticipated receipt of private scholarships when considering a student who is eligible to receive a federal Pell Grant award or financial assistance under the California Dream Act for qualification for institutional gift aid.

This bill, commencing July 1, 2025, would expressly extend those protections to students who are eligible for a Cal Grant award.